THE government had spent in excess of RM1.717 billion between 2015 and 2017 on subsidies for liquefied petroleum gas (LPG) by subsidising the wrong target group, the Auditor-General’s Report Series 1 found.

The target group for subsidised LPG are domestic consumers. However, the report found that commercial users who were not entitled for subsidies have also taken advantage of the subsidies.

The management of subsidies falls under the purview of three entities, namely the Treasury, Domestic Trade and Consumer Affairs Ministry and Royal Malaysian Customs.

The Treasury is responsible for determining the policy and the monthly subsidy rate in accordance to market prices. It is also in charge of paying out subsidies to the five suppliers.

Putrajaya had spent on RM4.409 billion on LPG subsidies between 2015 and 2017, which is 38.9% higher than the amount it was supposed to spend.

The report said the government was only supposed to spend RM730.08 million for 2015, RM676.08 million for 2016 and RM1.285 billion for 2017.

However, it had instead spent RM1.245 billion in 2015, RM1.094 billion in 2016 and RM2.069 billion in 2017.

The report said the inefficient management of the subsidies programme and the absence of a standard operating procedure (SOP) and system have contributed to the excessive spending. – July 15, 2019.